VKB Insurance Gets Value from Combining BPM and Decision Management
cheryl wilson 270003VHSH firstname.lastname@example.org | | Tags:  claims-processing business-rules business-rule-management business-process-manageme... policy-cancellation-and-r... risk-management business-process-improvem... decision-management insurance
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Maneeza Malik, Industry Practice Leader for Insurance, is another guest blogger this week. Enjoy her post here.
IMPACT 2011 was a great forum for companies across industries and geographies to share their experiences and lessons learned. One presentation, in particular, stood out for me -- Versicherungskammer Bayern (VKB Insurance), a leading German Insurance Company. It made an impression because of the level of collaboration that took place between business and IT stakeholders at various stages of the project. We talk a lot about this at IBM, and it’s always rewarding to see it play out in actual project implementations.
Here’s some background. VKB Insurance offers a diversified portfolio of products, spanning multiple lines of businesses (e.g., general insurance, health, retirement and life coverage). The company also operates savings and home loan banks with thousands of branches across the country. Like most diversified institutions, VKB’s business units were operating in silos with their own set of processes, IT environments and practices. As the business grew and processes became more complex, it became more difficult to ensure consistent enforcement of corporate and risk guidelines -- a must for any financial institution. To improve agility and transparency as well as enforce some level of standardization across business units, VKB opted for a combination of business process and decision management (specifically, business rule management capabilities) – the former to automate and optimize its processes and the latter to add decisioning capabilities to those processes.
Why combine these two technologies – BPM and Business Rules? VKB was new to both technologies, so they did their due diligence and chose a process they had a fairly good handle on and one where they had full buy-in from the business users. That process was policy cancellation and renewal. (I can’t stress enough how selecting the right project and having business users involved from the beginning is critical to success; in addition to identifying measurable business objectives.)
Combining BPM and decision management was critical to achieving VKB’s long term vision of building agile processes across the enterprise. While BPM provides the foundation for modeling and optimizing their processes, business rule management software enables them to automate all the business rules that are driving key business decisions, such as those related to determining who’s eligible for what product at what price to up-selling, cross-selling, and settling claims. Moreover, keeping business rules separate from the processes also means that VKB can work in lockstep with business users by not only making those rules visible to them but more easily extending rule management capabilities to business users as required.
Key results to date from this initial project include: 1) a reduction in manual processing by 80 percent; 2) a more standardized approach to modeling and implementing business processes and rules; 3) and more productive collaboration between business and IT users. Learn more about VKB's policy cancellation and renewal process improvement here.